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  • #16,421
  • Jul 24, 2013 2:44am Jul 24, 2013 2:44am
Quoting Martyfish
Interesting, strong Man & services PMI data from Germany and FRANCE !!
Yeah.....I smell a rat!!!
Doing what you like is Freedom. Liking what you do is Happiness.
  • #16,422
  • Jul 24, 2013 2:52am Jul 24, 2013 2:52am
and more question marks coming out of China, re slowing/hard landing, which hits Yen sentiment
I am a fallible imperfect person; so I must be a fallible imperfect trader.
  • #16,423
  • Jul 24, 2013 2:54am Jul 24, 2013 2:54am
Quoting realjumper
{quote} Certainly don't begrudge anyone a holiday Marty. In fact I have seen the UK 'summer' on TV here and I always have wondered how you all keep your sanity year after year!!
Its called "Bombay Sapphire"
I am a fallible imperfect person; so I must be a fallible imperfect trader.
  • #16,424
  • Jul 24, 2013 3:05am Jul 24, 2013 3:05am
Quoting realjumper
{quote} Yeah.....I smell a rat!!!
With all the monetary and fiscal slushing around, it is not really surprising, the real concern is why data isnt stronger.

And then the real elephant in the room, is what happens when stimulus is withdrawn.

For example in the UK, I have read, with QE and low interest rates, that is the equivalent of approx, 4% effective boost to GDP.

So under normal monetary and fiscal policies, currently the UK, would be contracting at around 3% !!
I am a fallible imperfect person; so I must be a fallible imperfect trader.
  • #16,425
  • Jul 24, 2013 3:38am Jul 24, 2013 3:38am
Quoting Martyfish
{quote} With all the monetary and fiscal slushing around, it is not really surprising, the real concern is why data isnt stronger. And then the real elephant in the room, is what happens when stimulus is withdrawn. For example in the UK, I have read, with QE and low interest rates, that is the equivalent of approx, 4% effective boost to GDP. So under normal monetary and fiscal policies, currently the UK, would be contracting at around 3% !!
Yeah, but I guess with Bernanke and his 'tapering' the pain for the UK's withdrawal of stimulus may not be quite as painful.

Then we have Japan, which I think is in a real mess, and it remains to be seen whether Abe can do something more than 'sticking plaster' politics to end his countries long term economic mess.

As for China, well, I don't buy much of what bloomberg (or anyone else for that matter), is trying to sell us. China's 'books' are closed and they didn't get to be the worlds number 2 economy by accident. Bloomberg et al can try and sell as much 'doom and gloom' about 'red' China as they want, but China will keep on trucking, no matter what bloomberg, or anyone else says!

Meantime, nothing really has changed in the EU group.....they are still in deep shit.....it's just the depth that varies!!
Doing what you like is Freedom. Liking what you do is Happiness.
  • #16,426
  • Jul 24, 2013 5:04am Jul 24, 2013 5:04am
Quoting realjumper
{quote} That was a perfect setup nikz......I missed it too because I was busy in other area's but it was a real sitter. It's good that you spotted it because that's the hardest part.....pulling the trigger is also hard of course, but that's a psychological thing.....
Thanks RJ! It is really encouraging when you say that.
The market tends to move when I'm not around. This morning, the same thing happened just with EU:
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  • #16,427
  • Jul 24, 2013 5:47am Jul 24, 2013 5:47am
Anybody seen a glitch like this before???
MT4 demo wont let me place trades

J
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Winning isnt everything but coming second sucks (Charlie Brown)
  • #16,428
  • Jul 24, 2013 5:54am Jul 24, 2013 5:54am
Quoting nikz
{quote} Thanks RJ! It is really encouraging when you say that. The market tends to move when I'm not around. This morning, the same thing happened just with EU: {image}
it was news related, so news with low volume = big volatility
  • #16,429
  • Jul 24, 2013 6:09am Jul 24, 2013 6:09am
Quoting Marviin
{quote} it was news related, so news with low volume = big volatility
Yes, something always moves the market. The great thing is that genesis gives us a good entry opportunities
  • #16,430
  • Jul 24, 2013 7:16am Jul 24, 2013 7:16am
Quoting jjre65
Anybody seen a glitch like this before??? MT4 demo wont let me place trades J {image}
MT4 demo......if the demo doesn't work what happens when it's live??

No I haven't seen that glitch but that's worrying on a demo platform!

PM1
  • #16,431
  • Jul 24, 2013 8:04am Jul 24, 2013 8:04am
RJ,

A book I read recently about the financial crisis, goes through all the issues of how China has got where is has.

This rapid growth has caused deep imbalances in the Chinese economy on a scale far far beyond that which has ever been seen before.

These deep imbalances have to be corrected at some stage, and when they are it will be brutal.

The longer the Chinese try to keep the economy bubling along, the bigger the bust.
I am a fallible imperfect person; so I must be a fallible imperfect trader.
  • #16,432
  • Jul 24, 2013 9:06am Jul 24, 2013 9:06am
Rumours in the market of a German sovereign downgrade.

These are usually false, but BEWARE !!
I am a fallible imperfect person; so I must be a fallible imperfect trader.
  • #16,433
  • Jul 24, 2013 11:23am Jul 24, 2013 11:23am
S&P are reporting, they have 27 sovereigns at risk of downgrade
I am a fallible imperfect person; so I must be a fallible imperfect trader.
  • #16,434
  • Jul 24, 2013 7:27pm Jul 24, 2013 7:27pm
Quoting Martyfish
RJ, A book I read recently about the financial crisis, goes through all the issues of how China has got where is has. This rapid growth has caused deep imbalances in the Chinese economy on a scale far far beyond that which has ever been seen before. These deep imbalances have to be corrected at some stage, and when they are it will be brutal. The longer the Chinese try to keep the economy bubling along, the bigger the bust.
But that's the point I'm trying to make Marty......China is a closed book. Various agencies and economists can theorize about the China economy but without having all the information (which is not available to them), all they can really present is a theory...in other words....a guess!

Much of the west would love China to have an economic meltdown to 'put them back in their place' but no matter how much bloomberg, CNBC and other 'western' agencies continue to spread their unsubstantiated rumours, China keeps on keeping on. Unfortunately much of this rumour mongering is spread out of fear of 'big bad China' becoming the number 1 world economy, but that is going to happen regardless of this McCarthyism that really doesn't belong in the 21st century.

Also, consider who owns much of the USA debt. What part do these persistent attacks on China by these 2 bit agencies play in that? I'm positive that this debt to China is a source of much embarrassment and angst to uncle sam:

"The largest foreign holder of U.S. debt is China, which owns more about $1.2 trillion in bills, notes and bonds, according to the Treasury.

In total, China owns about 8 percent of publicly held U.S. debt. Of all the holders of U.S. debt China is the third-largest, behind only the Social Security Trust Fund's holdings of nearly $3 trillion and the Federal Reserve's nearly $2 trillion holdings in Treasury investments, purchased as part of its quantitative easing program to boost the economy."

For sure China has some issues to deal with, human rights amoung them. But when throwing stones, we need to be very sure that we aren't throwing them from within a glasshouse!!

So, will their be a meltdown of the Chinese economy?......I don't know.....neither does anyone else!
Doing what you like is Freedom. Liking what you do is Happiness.
  • #16,435
  • Jul 24, 2013 10:26pm Jul 24, 2013 10:26pm
I'm no economist, but here's my thought.

China's growth over the last 20 years resembles Japan's from the 1960s to 1990s, except on a grander scale. Most noteworthy, is that it is a growth based on Fixed Asset Investments and Net Exports. Right now, FAI as % of China's GDP resembles what Japan's was when it's growth peaked (as has China's, the growth rate that is), hence continued FAI growth by say ~20% pa not only isn't possible, it will have less incremental impact. Kind of like Japan's highway to nowhere, China has expressways to limited populations and high speed rail investments over the last few years funded by debt that not only cannot pay pack principal, is having difficulties paying back just interest.

And net export is having a smaller net impact on GDP growth due to the Rmb appreciation, and government spending isn't likely to increase suddenly given the last splurge, the $4trn stimulus that occurred in 2009-11 that is one of the root causes of China's current imbalances.

So you're left with domestic consumption to drive growth, and while most of us have seen/heard of the Chinese's spending power overseas, it is by the portion that is better-off, and does not represent the whole country. As a whole, the biggest danger for China is that it hits the fate of Japan (ie little economic growth, ie either deflation in the case of Japan or stagflation), WITHOUT ITS MIDDLE CLASS BEING DEVELOPED. Whereas Japan had one of the highest per capital GDPs when it FAI and export driven model started to have limited/marginal impact to growth, China is still so far away from there that it seems it is unlikely to get there.

And this is why China's government/PBOC are so intent on keeping money supply tight this round, regardless of any crisis in Europe and or Japan (later, if), because they know another round of stimulus will probably shorten the time it has to help develop its middle class prosperity before the inevitable is reached (the last round made the rich richer, and marginalized a good portion of the middle class poorer by inflating away their real spending power).

Having said that, there are plenty of times left. While the official debt to GDP is understated due to the shadow economy, the Renminbi is managed, outflow is restricted and the yuan government debt is mostly local currency, so there's time for growth to gradually slow down before a crisis is more evident. Now is just the formation stage, and it could probably last 5- 10 years or more. But it will eventually come.

Not our problem to worry about for a while yet, I would think.
  • #16,436
  • Jul 25, 2013 1:11am Jul 25, 2013 1:11am
  •  Jamz
  • | Joined May 2012 | Status: Tops and bottoms are for bikinis | 798 Posts
Quoting nikz
{quote} Thanks RJ! It is really encouraging when you say that. The market tends to move when I'm not around. This morning, the same thing happened just with EU: {image}

At least you are recognizing the correct setups to play. Euro was news, news, and news yesterday but true, it was one good setup shown to us. No matter seeing them too late, that can happen all the time. Do not chase them is the rule but wait till you see one when the timing is just right. Generally, there is not a need to rush......
Have you found us one for tonight?..............I haven't yet.....only some moves I mustn't chase after......patience...... PA does seem to have changed lately.
  • #16,437
  • Jul 25, 2013 1:51am Jul 25, 2013 1:51am
Quoting Jamz
{quote} At least you are recognizing the correct setups to play. Euro was news, news, and news yesterday but true, it was one good setup shown to us. No matter seeing them too late, that can happen all the time. Do not chase them is the rule but wait till you see one when the timing is just right. Generally, there is not a need to rush...... Have you found us one for tonight?..............I haven't yet.....only some moves I mustn't chase after......patience...... PA does seem to have changed lately.
Good post Jamz

Have to remember also, consistency is what we, as traders, should strive for. If we can average 20 - 50 pips/day and apply compounding, we will have very nice accounts in 6 - 12 months
Doing what you like is Freedom. Liking what you do is Happiness.
  • #16,438
  • Jul 25, 2013 1:53am Jul 25, 2013 1:53am
The holding by China of US debt is down to 2 factors, the US trade deficit/China trade surplus, and China's pegging of Yuan to the dollar.

So the excessive trade imbalances are a massive problem for both countries, but it is the pegging of the yuan, that is the main factor is driving dollar holdings by China, which forces china to hold more and more dollars to maintain the peg.

But the bigger issues as I said are the imbalances within the Chinese economy that are the bigger problems, the points Rainyday made, are the key issues.

The imbalances between domestic consumption as % of GDP and public investment. Public investment is over 50% and domestic consumption is down to around 32%.

These extremes have never been recorded in the entire economic history, of the world ever, ever, ever. Vastly greater than Japan, or any other economy has ever recorded.

So the greater the reliance on investment (particularly in a state controlled country) the greater chance mal-investments and it requires more Yuan for an incremental rise in investment, which causes non-performing loans, which if allowed to run, causes liquidity issues in the banking sector.

This is why China has such a large shadow banking sector, it the only way to continue their state controlled investments.

This has to blow up at some stage, as liquidity for investment disappears. Slowing world growth will reduce imports (we are seeing this already), which will put more pressure on state investment to drive growth.

There is the problem.
I am a fallible imperfect person; so I must be a fallible imperfect trader.
  • #16,439
  • Jul 25, 2013 2:02am Jul 25, 2013 2:02am
Well, we'll have to agree to disagree Marty. I contend that it is impossible to make any meaningful examination/analysis of China's economic woes (or otherwise) without seeing the balance sheet. China is not going to ever show that.

Maybe China is headed for a bust as you say, maybe not. Without seeing the books, much less the internal workings of the Chinese system we cannot say for sure
Doing what you like is Freedom. Liking what you do is Happiness.
  • #16,440
  • Jul 25, 2013 3:17am Jul 25, 2013 3:17am
Quoting Jamz
{quote} At least you are recognizing the correct setups to play. Euro was news, news, and news yesterday but true, it was one good setup shown to us. No matter seeing them too late, that can happen all the time. Do not chase them is the rule but wait till you see one when the timing is just right. Generally, there is not a need to rush...... Have you found us one for tonight?..............I haven't yet.....only some moves I mustn't chase after......patience...... PA does seem to have changed lately.
And that's one of the hardest thing, isn't it? Seeing all those pips going by without you...But that's the difference if one wants to become successful and consistent trader. With the right mindset, those periods can be a good time to practice patience....

No good setups for me today...hope to see something good before the end of the day...
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